Tesla will lay off 9% of its employees in a major restructuring that the electric car maker insists will not affect plans for the Model 3, an electric car accessible to a mass audience.

Details

Tesla CEO Elon Musk tweeted on Tuesday that the move was "difficult but necessary" for the company to keep costs down while ramping up production of its latest model.

https://twitter.com/elonmusk/status/1006597562156003328

Musk promised that the cuts would not affect production and therefore would not affect the company's ability to meet Model 3 targets in the coming months. As the CEO of Tesla specified, layoffs will take place as part of the reorganization of the company, which he announced in May.
At first, Musk announced the upcoming cuts only in a letter to company employees. However, after the document was leaked to the press, the head of Tesla published it on his Twitter account.
According to Reuters, we are talking about the dismissal of several thousand employees. As a result of the reductions, the total number of employees of the company will return to the figure of 37 thousand people (this corresponds to the level at the end of last year).
On the news of the upcoming cuts, Tesla shares rose by 7%, but later fell again and at the time of publication of the news were 3% higher than the close of the previous day.
"The layoff of 9% of employees is a good number and I don't think we should expect more layoffs anytime soon," said Ephraim Levy, an analyst at CFRA Research.

Context

In early April, the company's stock was down about 35% from its peak in September last year, but signs that the company is on track to hit its 5,000-a-week Model 3 target helped recoup those losses.

Tesla will cut 9% of employees